Arne Duncan 'Thrilled' To Close Corinthian Colleges, Not So Ready To Help Its Former Students
The Department of Education was “thrilled” to shut down the for-profit chain Corinthian Colleges Inc., Education Secretary Arne Duncan declared Wednesday -- a claim that stands in sharp contrast with his department's frantic efforts last year to save the company.
In fact, the Education Department bailed out the financially troubled operator of schools under the Heald, Everest and Wyotech brands; helped it find buyers for some of its campuses; and publicly worried about the cost of allowing Corinthian to fail.
Duncan’s statement to MSNBC also contradicts his department's continued insistence that many former Corinthian students keep paying off their federal student loans. The department estimates that students took out more than $3 billion in federal loans in recent years to attend Corinthian-owned schools.
“Why would Secretary Duncan be thrilled to shut down Corinthian if there wasn’t systemic fraud?” asked the Debt Collective, a group of volunteers working with some 200 former Corinthian students who are refusing to make those loan payments. “It tells you everything you need to know that his department continues to collect on Corinthian students' debts when he could, under current law, erase it this very moment with a stroke of the pen.”
Dorie Nolt, a spokeswoman for Duncan, declined to comment.
Corinthian filed for bankruptcy in May, following a months-long disintegration amid state and federal allegations that it had systematically deceived students, luring primarily low-income Americans to take on unmanageable debt and leaving them with credentials of questionable value.
Over several months last year, while Corinthian teetered on the brink of failure, the Education Department declined to inform current or potential future students that the company faced lawsuits or pending investigations from about half of the country’s state attorneys general, the U.S. Department of Justice, the Securities and Exchange Commission, and the Consumer Financial Protection Bureau. The accusations ranged from duping students into taking out unaffordable loans by advertising false graduation and job placement rates, to employing illegal debt-collection tactics.
The department apparently hoped that Americans would continue to enroll at Corinthian’s schools to boost their value to potential buyers. Even as Corinthian's prospects grew dimmer, the department let it enroll as many students as it could --ignoring the demands of a dozen Democratic senators -- and let it encourage those students to take out loans to pay a company that Duncan now claims his department was “thrilled to be able to close down.”
“If Secretary Duncan is ‘thrilled’ Corinthian shut down, why did the department allow students to continue to enroll at the schools, and continue to provide it with federal student loan money, if they knew this school had the ethics of a payday lender?” the Debt Collective said.
Corinthian has steadfastly denied any wrongdoing. The company has blamed federal and state regulators for its abrupt closure.
The Education Department’s moves culminated with a November deal it brokered Arne Duncan 'Thrilled' To Close Corinthian Colleges, Not So Ready To Help Its Former Students:
